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FIFA World Cup: The Business Beyond Football


This summer, for a month or so, all eyes will be on Russia, the host of the upcoming FIFA World Cup. Although the UK bade as well, it was Russia that won the right to organize the event (no, the UK won't host the next one either - it will take place in Qatar in 2022). Hosting such a major event is a privilege for sure. But from a different point of view, it is also big business for the host. How big? Well, let's try to dig a bit into the matter to find out.

 

Stadiums

 

The matches of this year's World Cup will be divided between the stadiums of 12 Russian cities, ranging from Moscow and Saint Petersburg (here are the largest stadiums in the country) to Volgograd, Nizhny Novgorod, and Sochi. Most of these were repaired - or outright rebuilt - before the event, which translates into massive contracts awarded to businesses. The Luzhniki Stadium, for example, was demolished in 2013 and rebuilt from scratch, at a cost of 19 billion rubles (over $336 million at today's exchange rates). This is the largest stadium in Moscow, with 81,000 seats - the other projects probably cost less. This doesn't make the entire project any less expensive.

 

Tourism

 

By the time this article was written, over 3 million tickets to the 2018 edition of the FIFA World Cup were requested, at a cost of between $100 and $1000 each. There is no way of telling how many of these requests come from Russia, and how many will go to football fans around the world. Those coming from abroad will spend on lodging, food, drinks, snacks, and FIFA merchandise, too.

 

While we can't predict how much money Russia will get this summer, we know that FIFA made $4.8 billion in 2014, and ended the four-year cycle with $2.6 billion in profits.

 

Merchandise

 

The official FIFA shop already has the merch for the 2018 event - jerseys, balls, sneakers, and the event's mascot, Zabivaka (the word translates as "the one who scores"). The products are not cheap at all - Zabivaka prices range from €4.95 for a keychain to €49.95 for a Zabivaka wall tattoo set (and many other products are much more expensive). In 2014, FIFA made over $100 million on licensing its brands to third parties, from games released at new slot sites to clothes, bags, shoes, you name it.

 

Broadcast rights

 

This is perhaps the biggest business of them all. The FIFA World Cup is big business for the channels broadcasting its matches, this is why multiple networks usually outbid each other to obtain the rights to do so. In the UK, ITV has apparently outbid the BBC, with the national broadcast company only showing five of the games - England's opening two matches (against Tunisia and Panama), the first two games in the quarter-final (including England's game if they progress), and the final.

 

In 2014, TV rights represented more than half of FIFA's revenues ($2.428 billion out of a total of $4.826 billion).


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